Shadow chancellor John McDonnell will tomorrow tell families that a Labour government could save them thousands of pounds a year as he seeks to shrug off criticism of his spending plans.
In a speech in Birmingham ahead of the 12 December polling day, McDonnell will attack the Tories for overseeing a “cost of living crisis” and defend his party’s manifesto against arguments that it would cost workers through higher taxes.
The Conservative party has argued that Labour’s manifesto promises – which would add over £80bn a year to government spending – would mean higher taxes for people on middle-incomes.
The Institute for Fiscal Studies (IFS) has backed up this claim, saying Labour’s argument that the extra spending would be shouldered by the richest five per cent is “not credible”.
Today, McDonnell will seek to move the debate on to how much average earners would save under a Labour government and highlight that real average earnings are yet to return to their pre-2008 levels.
Citing policies such as a higher minimum wage, free broadband and free school meals, he will ask to be judged on “the money in your pocket”.
For example the shadow chancellor will argue that Labour’s minimum wage increase to £10 an hour for over-16s will benefit the worst-paid workers by at least £3,440 a year. Free primary school meals will save families £440 a year per child, he will say.
McDonnell will say the combined impact of Labour’s policies could save families £6,700 a year. This figure includes savings from policies that will not be carried out until 2030, however, as well as savings from rail fares, although most people do not commonly travel by train.
“I want every family, every household in Britain to have sound finances,” he will say. “That means putting a stop to rip-off Britain and making real change.”
Tory chief secretary to the Treasury Rishi Sunak said: “It defies belief that Corbyn’s Labour are claiming they would reduce living costs at the same time as standing on a manifesto containing tax rises which would hit ordinary hardworking people across the country.”
The IFS has questioned whether Labour’s policies are deliverable and suggested they could damage the economy, however. The think tank’s director Paul Johnson said last week: “One simply cannot say with confidence whether the overall effect of Labour’s plans on growth would be positive or negative.”